Service Stream Surges with $7.6bn Work in Hand and 37% Profit Jump
Service Stream has delivered a robust FY25 performance, highlighted by a record $7.6 billion order book and a 36.7% increase in adjusted net profit after tax. The company’s diversified contracts and improved margins set a strong foundation for FY26 growth.
- Record $7.6 billion Work in Hand, up 40%
- 36.7% growth in adjusted NPAT to $68.5 million
- Utility division surpasses $1 billion revenue with margin gains
- 98% contract retention rate maintained
- Net cash position strengthens to $73.6 million
Strong Financial Momentum
Service Stream Holdings Limited has reported a solid set of full-year results for FY25, underscoring its steady growth trajectory in the infrastructure maintenance sector. Total revenue edged up 1.2% to $2.42 billion, while underlying EBITDA rose 13.1% to $146.1 million, reflecting improved operational efficiency and disciplined cost management. The company’s adjusted net profit after tax (NPATA) surged 36.7% to $68.5 million, signaling enhanced profitability and effective conversion of earnings into bottom-line results.
Expanding Work in Hand and Contract Stability
A standout highlight is Service Stream’s significantly expanded Work in Hand (WIH), which climbed 40% year-on-year to a record $7.6 billion. This robust order book, predominantly composed of long-term, annuity-style operations and maintenance contracts, provides strong revenue visibility and underpins the company’s growth outlook. Impressively, the group maintained a 98% contract retention rate for contracts that proceeded to market, demonstrating client confidence and operational reliability across its diversified portfolio.
Utility Division Leads Growth
The utility segment crossed the $1 billion revenue milestone, delivering a 3.7% increase to $1.008 billion and a notable 100 basis points improvement in EBITDA margin to 4.5%. This margin expansion is expected to continue into FY26 as operational efficiencies and contract wins in water and industrial sectors gain traction. The division’s performance is a key driver of the group’s overall margin uplift, which rose 60 basis points to 6.0% across all segments.
Balance Sheet Strength and Shareholder Returns
Service Stream’s balance sheet remains robust, with net cash increasing by $65.7 million to $73.6 million, supported by strong cash flow conversion exceeding 104%. This financial strength provides strategic optionality for organic growth and potential acquisitions. Reflecting confidence in future earnings, the company declared a fully franked final dividend of 3.0 cents per share, bringing the total FY25 dividend to 5.5 cents per share, a 22.2% increase on the prior year.
Outlook, Building on a Solid Platform
Looking ahead, Service Stream anticipates continued earnings growth in FY26, supported by its expanded order book, improving utility margins, and a strong pipeline of growth opportunities across telecommunications, utilities, and transport sectors. The company’s strategic focus on safety, sustainability, and technology investments further enhances its competitive positioning in a market characterised by ageing infrastructure and increasing digitisation.
Bottom Line?
Service Stream’s FY25 results set a confident stage for FY26, but execution on margin improvements and contract expansions will be key to sustaining momentum.
Questions in the middle?
- How will Service Stream capitalise on its strengthened net cash position for acquisitions or new investments?
- What are the risks to maintaining the high 98% contract retention rate amid competitive tendering?
- Can the utility division sustain its margin improvement trajectory into FY26 and beyond?
